Re: Fracking

Posted by JerryS on June 10, 2015 at 22:42:42 from (98.80.89.199):

In Reply to: Fracking posted by John in La on June 10, 2015 at 16:31:35:

John, I am up here in NW Louisiana, smack in the middle of the Haynesville Shale (gas). Before the Haynesville discovery was made public, the leasehounds came around and locked up every inch they could. As there had been very little exploration and production in the area for many years, they were able to convince many of us property owners to sign a sucker lease (minimum royalty, minimum lease bonus). They told us that they wanted to lease up some areas just to "possibly, maybe, someday...." see if there was anything there. Within two or three months the news leaked out that we were sitting atop the largest (at that time) natural gas pool in the nation. By that time they had the majority of the prime tracts locked up, but from then on they had to pay through the nose for the remaining acreage. The late signers got up to 100 times what I got.

So, if your parents' land has any value to a producer, they'll hear from them in time. They shouldn't jump at the first offer, nor should they hold out for pie in the sky. In any case, three lots won't generate a lot of royalty, but if the prices (oil and gas) get back up, you might be pleasantly surprised. In their case, though, sale or rental might be the better option.

In Louisiana production is governed within a "production unit", which is defined as a section (one square mile). So, your parents' property will fall within a production unit if one is put together, regardless of whether they lease. Within that section up to eight wells can be drilled. That used to mean eight different wells in eight different locations within the section. Now, with directional drilling, they can drill and produce an entire section from one drill site. Unfortunately, with the price of natural gas hovering at almost historic lows, there's not a lot of drilling going on. Those of us who have producing wells are seeing our gas being sold for two to three dollars per thousand.

Just a comment about the fracking thing: I'm surrounded by hundreds of gas wells in my area, including three 1,200 feet from my house and my well, and all of which are situated above the Carrizzo-Wilcox Aquifer. I have heard of no water quality problems resulting from fracking. I was much more concerned about the drilling companies drawing massive quantities of potable water from the shrinking aquifer to carry out their fracking operations.

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